Q: What do you think of Denison Mines in terms of valuation/leverage to higher uranium prices/balance sheet/risk? Rick Rule called it a no-brainer and said if their leaching process works it could be a big home run. Curious to hear your thoughts.
Are there other names you prefer to gain exposure to rising uranium prices?
Thanks
Are there other names you prefer to gain exposure to rising uranium prices?
Thanks
5i Research Answer:
DML has big leverage to uranium and could do very well under the right conditions and if the technology works. We would consider it one of the better ways to play the sector, though historically we have been a bit lukewarm to it as it was not generating any material revenue (still isn't). Also, cash flow has been negative for as long as we can remember. But, in terms of potential in a sector rally, it has it, and the stock is hitting new highs today. Our 'default' sector names are CCO and NXE. Surprisingly, CCO is doing the best this year even though it is significantly larger than the others. It is the 'safer' call and is seen by global investors as a blue chip sector name. A combination of these three could work well, in our view.